Does a Lower Stock Price and New Contracts Make SpaceX Stock a Buy?

In many ways, the public debut of Space Exploration Technologies Corp. (NASDAQ:SPCX), or SpaceX, was historic. The launch was undoubtedly the biggest initial public offering (IPO) of all time. The company raised $85.7 billion in all, and demand for the stock pushed its market cap to a record-setting $2 trillion.

Despite the frenzy, some investors stayed on the sidelines, as SpaceX's valuation soared into the stratosphere. At one point last week, the company's market cap surged to more than $2.8 trillion, pushing its valuation to roughly 150 times sales.

As the euphoria has worn off, however, SpaceX stock has cooled, falling 23% from its peak (as of market close on Tuesday). That puts the share price below its closing price on the day of its public debut. Additionally, the company has inked several sizable deals, improving its financial outlook.

Does its lower stock price and growing backlog make SpaceX a buy? Let's run the numbers.

Image source: Getty Images.

A trio of new deals

SpaceX, or more specifically the company's xAI segment, has recently had several contract wins that make the math a bit more favorable for potential investors. Let's take a look at these deals and what they will mean for the company's financial results.

Last month, SpaceX inked an agreement with artificial intelligence (AI) start-up Anthropic to supply compute capacity from the company's Colossus data center. Under the terms of the deal, Anthropic will pay SpaceX $1.25 billion per month until May 2029, for a total contract value of more than $40 billion.

Early this month -- just ahead of its IPO, SpaceX revealed in a regulatory filing that it had reached a deal with Alphabet to provide access to 110,000 Nvidia graphics processing units (GPUs) and related computing infrastructure between Oct. 2026 and June 2029. Under the agreement, Google will pay $920 million per month for the compute capacity, valuing the deal at $30 billion.

Just this week, SpaceX added to its tally by signing a deal with Reflection AI, giving it access to Nvidia GB300 chips at the Colossus data center. Under the terms of the agreement, the AI start-up will pay SpaceX $150 million per month beginning in July and running 42 months through the end of 2029, valuing the deal at $6.3 billion.

This latest agreement is smaller by comparison, but adds to the growing backlog of deals that will provide xAI -- and SpaceX by extension -- with a steady stream of revenue.

Here's the math

Taken together, these three deals total $2.32 billion per month or $27.84 billion per year. In 2025, SpaceX generated revenue of $18.67 billion. By adding the newly minted agreements, the math suggests the company is on track to deliver revenue of $46.5 billion in 2026. SpaceX ended the trading day on Tuesday with a stock price of ~ $156 and a market cap of just over $2 trillion. Running the numbers shows SpaceX is selling for 44 times forward sales.

To give that number some context, Palantir -- which is often cited for its egregious valuation -- is selling for 36 times forward sales, making it a bargain by comparison. This shows that SpaceX still has a long way to go before most investors would consider its valuation "reasonable."

Is the stock a buy?

Much of the investment thesis for SpaceX centers on the company's ability to tap into what it estimates is a $28.5 trillion total addressable market (TAM) for its launch, connectivity, and AI markets. Moreover, SpaceX will have to execute on its "unique ability to scale new trillion-dollar markets across space, connectivity, and AI."

That said, and with all the usual caveats out of the way, if you believe that SpaceX can make good on its plans while continuing to ramp its revenue and eventually achieve profitability, it might be worth a look. However, the stock is likely to go lower as the year goes on. For investors who are still bullish, any purchase should be a small part of a well-balanced portfolio.

Danny Vena, CPA has positions in Alphabet, Nvidia, and Palantir Technologies. The Motley Fool has positions in and recommends Alphabet, Nvidia, and Palantir Technologies. The Motley Fool has a disclosure policy.